1. The euro-dollar spot exchange rate is $1.355/euro on 9/30, but you believe the dollar will appreciate relative to the euro over the next few days. On 9/30, you decide to open a position consisting of five futures contracts to trade based on your belief. Futures contracts on the euro have 70,000 euros attached. The futures price on 9/30 is $1.355. Your broker requires an initial margin of $13,000 per contract and a maintenance margin of $9,000 per contract.

Find your ending margin account balance (in USD) the day after you open your position (10/1) if the futures price is $1.395 on that day. Assume any deficits are eliminated to keep the account open and any excess funds remain in the account.

A. 59,000

B. 79,000

C. 51,000

D. 31,000

E. none of the above

2. The futures price on 10/2 is $1.390 per euro. What would be your ending margin balance (in USD) on 10/2? Assume any deficits are eliminated to keep the account open and any excess funds remain in the account.